Dairy Crest expects profits to rise despite tough times

Monday 19 September 2011 07:21 BST

Dairy Crest Group, the maker of Cathedral City cheese, said it expected overall profits for the first half to be slightly ahead of the corresponding period last year as selling price increases offset the impact of input cost pressures.

The chilled dairy foods company, which also makes Clover spread, Country Life butter, St Hubert Omega 3 spread, and FRijj, said it was confident of delivering a full-year profit in line with its expectations.

"Despite the pressure on consumers' disposable incomes, sales of our five key brands in total have continued to increase, although volumes of these brands will be lower than in the same period last year," the company said in a statement.

Inflation in Britain held at a two and a half year high in May as food prices rose, squeezing Britons' finances and leaving rate-setters stuck firmly with the dilemma of how to tackle soaring prices while the economy is weak.

The company also said net borrowings at end-September would be higher than a year ago as anticipated, reflecting higher cheese stocks and increased capital investment.